Farm Labor Shortages Continue to Plague California’s Ag Industry

Popularity of H-2A Visas is Increasing as a Way to Hire Legal Foreign Guest Workers

Results of a voluntary online survey conducted by the California Farm Bureau Federation’s (CFBF) Federal Policy Division eight months ago showed that farmers and ranchers in every California region reported continuing difficulty in finding enough workers for planting, cultivating and harvesting food and other crops. This trend is continuing, and for some, it is a major concern.

Of the 762 farmers and ranchers who took part in the October 2017 survey, 55% said they had experienced employee shortages, and 69% said they had problems when trying to hire seasonal workers. Shortages have been seen since a similar survey in 2012 found that more than half of growers replying said they could not find enough workers.

A majority of growers reporting shortages were unable to recruit up to 50% of their seasonal needs, with 15% unable to recruit more than 50% (a majority employ 15 or fewer people on a permanent basis and hire 50 or fewer during peak season). At the same time, some respondents did not report any labor shortages, indicating there is a wide variance in the experience of growers depending on the region and other factors.

These alarming statistics came despite increased recruiting efforts, higher wages, benefits and other incentives, as well as the fact that more growers are converting to less labor-intensive crops and investing in mechanization.

Survey findings indicated that farmers of crops that require fewer employees and use mechanization during the peak season generally have an adequate number of workers. However, farmers who rely on peak season hand labor and lack mechanical harvesting methods continue to see employee shortages.

“The labor market is definitely tighter,” said Bryan Little, director of employment policy with the California Farm Bureau Foundation. “I get calls from farmers in the spring asking for my thoughts on whether they are going to have enough of a workforce for their crops. With increased ICE enforcement and continuing talk about extending the border wall, prospective workers from south of the Rio Grande are scared, fearing if they were to go back home they may not be able to return – but they continue to come here to earn money for their families.”

He said with the CFBF did the labor survey, it made a decision to cast a wide net, understanding that very large Ag sectors in California (almonds, for example) would have very little labor usage. “We wanted to show the contrast between almonds as an example and dairy – a very heavy labor-using section – to give a more accurate picture of the problem.”

Like a canary in a coal mine signaling the presence of unhealthy air, Little said some of the early warning indicators of a labor shortage include the number of farm workers available for the asparagus harvest (March/April, which may be delayed due to weather conditions), sweet cherries (May/June), strawberries (early April to June) and pears in Lake County (harvested in July).

Little remarked that the days of 1.2 million farm workers chasing a million farm jobs are long gone. “Today we’ve moved from a (labor) buyer’s market to a seller’s market. If we have 600,000 workers today, farmers could probably use 800,000. What growers typically tell me is if they have eight crews they could use 10, and if they have eight people on a crew they could use 10 – that’s been pretty consistent for six to eight years.”

The EDD reported an employment total of 472,500 Ag workers in August of 2017, based on North American Industry Classification System (NAICS) codes 111 through 115. He admitted that no one knows how many unfilled farm jobs there may be in California.

Some calculations show that from 50% to 70% of hired workers may not be authorized to work in the U.S. However, farmers want to hire a legal workforce and support the creation of effective programs that allow those from foreign countries to enter the states legally to harvest crops.

With recent changes in farm worker wage policy, some believe the labor shortage could get worse because employers could limit overtime. The goal of AB 1066 is to be a benefit to workers by eventually shortening the workday from 10 to eight hours, and the workweek from 60 to 40 hours gradually over several years for agricultural employees, with overtime pay required for time worked after eight hours a day and 40 hours a week. Today an employee working more than 10 hours a day receives overtime pay. This bill also reaffirms one day in seven as a day of rest (a provision that became effective January 1, 2017 as part of Labor Code section 554a). Little noted that increasing the minimum wage (Senate Bill 3) will also escalate labor costs.

To avoid paying overtime, growers could limit workers to a 40-hour week, while hiring additional employees to fill peak season jobs at the base rate. This could lead to fewer dollars earned than was possible before Assembly Bill 1066, which could trigger flight to other jobs by Ag workers employed “at-will” without labor contracts. The new AB 1066 hour and week adjustments are set to become effective January 1, 2019, unless postponed by the governor.

According to Little, farm worker hourly pay rates throughout California average $10/hr. in the southern valley; $12-$13/hr. in the upper central valley; $15-$20/hr. in coastal areas and $19/hr. in San Diego’s cut flower growing region. Permanent, non-seasonal farm workers can earn substantially more.

“Last year, several growers told me they can’t compete with government policies that discourage rather than encourage workers (such as means-tested benefits that decrease as income increases, such as unemployment insurance benefits, etc.). But this has not reduced farmer demand for workers, or the desire of those from Mexico who want to work here to be able to come,” Little added. “As a result, more growers are becoming involved with the H-2A temporary agriculture labor visa program.”

Based on the latest information available, posted by the Office of Foreign Labor Certification, 200,049 H-2A jobs were certified in the U.S. in 2017 (the highest number of H-2A certified visas to date). This total was only about 6,000 less than the 206,156 positions requested (including 300 applications denied or withdrawn). Half of all H-2A jobs certified were in five states, Florida, North Carolina, Georgia, Washington and California.

In California, the number of H-2A jobs certified rose from 2,600 in 2006 to 15,232 in 2017 – nearly a 500% increase. Based on an estimate of grower requests, the total could rise to nearly 20,000 H-2A certified positions in 2018.

A key provision of H-2A is that an employer must provide worker housing at no cost to employees that meets federal and state safety and other standards. Employers must also pay Workers’ Compensation Insurance for H-2A workers covering occupational injuries, but not health insurance coverage. Worker’s Compensation insurance has been required for California Ag workers for many years.

“I see H-2A growing by leaps and bounds,” said Little. “There is a rise in the number of H-2A workers in California’s central valleys and coastal areas. We’ve seen increased interest in this program as well as exponential growth over the past five years.”

Workers who complete half the season with an H-2A program employer must be reimbursed for transportation and subsistence costs associated with traveling to the place of employment. Those completing the full 10-month season must be paid for their transportation costs when returning home. Growers avoid making reimbursements by providing transportation for H-2A workers to and from the Mexican border to the worksite, while also paying for meals during the trips. However, employers are not required to pay for worker food during their contract period.

While the October 2017 CFBF survey revealed that fewer than 3% of respondents using the existing H-2A agriculture immigration program, more Ag employers who were not previously involved with the H-2A program are thinking about participating.

“It should be remembered that at present only 15,232 of the 473,000 farm labor workforce come under provisions of the H-2A program, so the influence of the wages and benefits required for H-2A workers on the overall market is still small – however, it’s big in coastal areas where H-2A employment is concentrated,” Little said.